Deciding how much to charge for your rental property is no easy task. So many factors come into play when it comes to setting the rent, and as an expert in property management (Leesburg, FL area), we have seen all kinds of worst-case scenarios play out. Many landlords right now are also concerned about the impact that COVID-19 will have on the ability of their tenants to pay rent—so the idea of potentially lowering the rent on your property might seem frightening when you have a mortgage to pay.
However, if your property has been vacant for a while, it might not be the novel Coronavirus that's causing your vacancies! When you set the rent too high for what your property is really worth in rent, you scare off qualified tenants. Still, especially in times like these, you can't afford to undercut your properties with a slash to your rental rate.
If worrying over charging too much has got you thinking about lowering the rent, don't react: research. It's best to have concrete numbers define your plan of action than collective panic. More than ever, your renters are relying on you to approach your rental home from a collected, professional, and confident place.
Keep in mind that if all this seems overwhelming right now, Gunn Property Services is here for you. As a community, we're in this together! Today, let's dive into the approach that only the best property management Leesburg, FL, has to offer will use when the rent is too high.
What Happens When the Rent Is Too High?
The simple fact is that if you're charging too much for rent, you're less likely to be able to rent out your property effectively. Charging too much for rent is one of the leading reasons why rental properties stay vacant. If your rent is too high, you will:
- Lose tenants to competitively priced units: In a competitive marketplace, you'll have a hard time keeping tenants if you're charging too much for rent. Once a tenant's lease ends, it might not be so easy to convince them to sign a new lease.
- Attract the wrong renters: If you react strongly to having a rental rate that's too high by gouging your price, when it comes time to stabilize the rent again, you may lose tenants who are used to paying less. This results in turnover costs and more vacancy in the long run.
- Have a hard time filling vacancies: Again, it's important to look around you. If you are charging more than is typical for a rental in your neighborhood, tenants will probably seek housing elsewhere.
- Lose money due to units sitting empty: Remember, you still have to pay property taxes, insurance, and the mortgage no matter what—and you may even be paying for utilities when your investment home remains empty.
How to Determine If the Rent Is Too High
Whether you're renting out a single-family home or a duplex, you need to determine how much your home should rent for. Setting the rent too low can be just as detrimental as setting it too high! This eats into your earnings and can misrepresent the quality of your property.
As the best provider of property management Leesburg, FL, has to offer, we know that the ideal way to determine what you should charge for rent is to measure your home up against other properties in your city. Specifically, you want to look for properties that have features in common with yours:
- The neighborhood: Make sure you're not just looking at other rentals in your city! Rentals vary widely, as certain parts of town are considered more desirable than others. Focus your search on rentals in your neighborhood, and even on your specific street.
- The number of bedrooms: Look at properties that are similar in size to yours, including the number of bedrooms, bathrooms, and square footage.
- Single-family homes vs. multi-family homes: Rentals in single-family homes will generally bring in more than individual units in a multi-family property.
- Historic homes vs. new construction: A lot of tenants may be willing to pay more to rent a newly built unit than a historic home—but not always. In any case, be sure to take the age of homes into consideration when comparing them to your own.
These comparisons are a tool that landlords, property investors, and property managers all use to determine the amount that a rental property can generate. It's not useful only for setting the right rent but can also help you determine whether or not a specific property has the potential to be profitable.
How Property Management in Leesburg, FL, Can Help
If you're struggling to determine how much you should charge for rent in your rental property, consider working with a property manager! Our team at Gunn Property Services has the experience you need to determine just what your property should be renting for.
Better yet, we provide this insight absolutely free through our Rental Analysis! The process we use is research-driven and proactive—rather than reactive. The last thing any landlord needs right now is to lower their rent so drastically that they jeopardize their ability to maintain their rental home!
It can be challenging to obtain all this information on your own—and at the end of the day, your time is better spent with your family than crunching numbers. Take advantage of our skills and resources during this trying time so you can return your focus to what really matters.